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Title: Environmental risks, localization and the overseas subsidiary performance of MNEs from an emerging economy
Authors: Liu, Xiaohui
Gao, Lan
Lu, Jiangyong
Lioliou, Eleni
Keywords: Chinese MNEs
Environmental risks
Localization strategies
Subsidiary performance
Issue Date: 2015
Publisher: © Elsevier
Citation: LIU, X. ... et al, 2015. Environmental risks, localization and the overseas subsidiary performance of MNEs from an emerging economy. Journal of World Business, 51(3), pp. 356–368.
Abstract: Despite the fact that multinational enterprises (MNEs) from emerging economies invest actively in host countries with substantial risks, we have limited understanding of how they manage environmental risks to achieve desirable performance in their overseas subsidiaries. Drawing on resource dependence theory, we argue that different localization strategies serve as a mediating mechanism linking environmental risks and overseas subsidiary performance. Our findings based on a sample of Chinese MNEs show that industry risks significantly reduce the levels of input localization and marketing localization of Chinese MNEs’ subsidiaries, and thus negatively affect subsidiary performance. Political risks have an insignificant impact on input localization and marketing localization, but a positive direct impact on Chinese MNEs’ overseas subsidiary performance. We also find that state-owned MNEs’ localization strategies are more sensitive to industry risks compared with privately owned MNEs.
Description: This paper was accepted for publication in the journal Journal of World Business and the definitive published version is available at http://dx.doi.org/10.1016/j.jwb.2015.05.002
Version: Accepted for publication
DOI: 10.1016/j.jwb.2015.05.002
URI: https://dspace.lboro.ac.uk/2134/18408
Publisher Link: http://dx.doi.org/10.1016/j.jwb.2015.05.002
ISSN: 1090-9516
Appears in Collections:Published Articles (Business)

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